fyrstormer
Banned
All currency is fiat currency. Who decided that gold should be used as currency? Certainly its physical properties make it excellent for use as a Bronze-Age currency*, but for most of human history, the vast majority of people all needed the same basic commodities, and those commodities were easily traded without the use of currency. (If you raise chickens, it's not going to be difficult to find people who will accept chickens and eggs in exchange for just about anything else you need; if you make clothing, it will be similarly easy to trade pants for anything else you need; etc.) Gold has always had a certain decorative appeal, because humans like shiny things just as much as most animals with high-resolution vision, but it took the force of militarized governments to say "you shall transact goods and services using these coins, and this list of prices shall be followed, or you'll be put in prison."
The primary advantage of currency has always been it allows the specialization of labor -- no longer do people need to raise/gather/produce multiple commodities of various values to fund different types of purchases -- but how much inedible metal is a cow worth, anyway? You can't eat gold, you can't wear gold (not as clothing, anyway), you can't burn it, you can't build a house from it, you can't use it to treat illness, etc. -- the very belief that gold (or any currency) is good for anything besides what it can be used for requires a suspense of disbelief that most people forget about, because we're all used to doing it nowadays. The assignment of monetary value is always arbitrary until people learn how to think of value using numbers.
As long as currency is unavoidably an abstraction of real-world value, it makes much more sense to base the value of currency on the value of EVERYTHING the nation has, instead of the quantity of just one resource. Why should our purchasing power be restricted to the amount of gold we have, when we have so many other resources which are also valuable? It also makes more sense from a practical standpoint to use a currency that isn't made from something that people will want to hoard for non-financial reasons, like often happens with gold -- people hoarding currency just because it's shiny is a waste of a useful material. No, I'm not worried about the fact that we use "fiat currency", because that is not the problem -- the problem is the list of "valuable things" has been twisted to include imaginary things, and we all know who we have to thank for that.
*hard enough to keep its shape but soft enough to cast and stamp at relatively low temperatures, rare enough that individuals couldn't amass huge quantities but common enough that national governments could amass huge quantities, distinctive color and weight, immunity to corrosion, etc.
This part I agree with wholeheartedly. (wholemindedly?) All monetary value is imaginary unless it represents the value of collateral in the real world. While raw materials, finished products, and the capacity to perform services are all valuable forms of collateral, simply selling a piece of paper at a higher price than you bought it for does nothing more than contribute to inflation, unless that piece of paper is itself a deed for something which has actually increased in value. As we know from the housing bubble, that was not the case for a few hundreds of thousands of houses across the country.
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